People worried they would be much worse because a couple weeks ago, CEO Tim Armstrong fired AOL's ad sales boss, Jeff Levick, and replaced him with Ned Brody, who had been running AOL's subscription businesses and acting as the "COO" of AOL's advertising group.

During a conference call to go over the numbers today, Armstrong explained why he made that move.

Paraphrased:

There is no strategy change. Ned is intimately aware of the strategy and helped drive the strategy.

What Ned brings to the table: if you look at our overall portfolio of content sites, we have strong assets. What I'd like is to see the advertising business's operational scale grow at the same rigor as the rest of the business.

Within our inventory planning systems, data and insight systems, and reporting for ad customers there is a huge incremental life to be had there.

Ned will help with that.

Other notes from the call:

June was a terrible month. Search and display came in lower than expected.

Some of the social networks are very hot from a client perspective, but I don't think there's any advantage in results.

Traffic is basically flat because AOL has stopped buying traffic in unhealthy ways.

In the past month, AOL.com started to grow again. Patch has gone from 0 to 10 million users [editor's note: sounds big, but it's not.]

How flexible is AOL's cost structure? The access business is variable. Headcount keeps getting pruned, but the money is getting reinvested. In July, 150 people were let go across the board. The plan is to "redeploy" the dollars toward growth.

We measure the individual Patches. The first three Patches had double digit growth in Q2. Should we be trimming Patches? We see strong growth across the Patch spectrum. I would say as investor myself, if we have the metrics we think we're going to have at the end of this year, Patch will look like a very smart investment on the AOL side. Christie, Booker, Patch is watched by politicians.

Board meeting coming for Patch. Believe its above-track. Not breaking out per-Patch revenues. We could do a better job on revenue and that's what we're focused on.

How Patch makes money: 1. National sales force sells to big customers like HP. 2. Feet on the street sales force which is regionally based and in-market. 3. Inside sales force. 4. Partnerships with other companies that have localized revenue. The main focus is the Patch sales force and the inside sales force.

We have half the amount of people we used to have. Have been focused on investing on areas that either drive unique visitors or drive the monetizaiton of UVs. We're shifting out of support.